More than 510 years after the conquest of Latin America, critical opinions are still voiced with regard to the quality of the subcontinent’s insertion into the international system: “When one begins to see the multiple business connections and interests, it is difficult to avoid concluding that the Plan Puebla Panama (PPP) is more about energy and resource extraction than it is about development”. Arguments along the lines of this PPP critique have been frequently mentioned when discussing topics such as declining terms of trade for raw materials, the unequal access to the world markets, exploitative practices of labour-intense industries, socially detrimental impositions of structural adjustment measures, the increasing hegemony of the United States (US) over Latin America through new free-trade arrangements or projects such as Plan Colombia, and many more.
The purpose of this paper is to look beyond plain accusations by assessing the international arena Latin America found itself in since 1870 as well as the efforts made by Latin America to achieve a more equitable insertion into it. Taking into consideration the complexity of the topic, I will only broadly outline earlier attempts while focussing on efforts taken after the Great Depression of 1929. The essay will be organised in four main sections covering the three major phases plus a conclusions section: Primary commodity exports (PCE), import substitution industrialisation (ISI), neo-liberalism (NL), and the conclusions section which will also cover Latin America’s prospects. The important aspect of regionalism will be split into “old regionalism”, which will be covered in the ISI section, and “new regionalism”, which falls into the phase of neo-liberalism.
Table of Contents
1. Primary commodity exports (PCE)
2. Import substitution industrialisation (ISI)
3. Neo-liberalism (NL)
3.1 Origins, measures and effects
3.2 New regionalism
4. Conclusions and Prospects
Research Objectives and Key Topics
The objective of this paper is to evaluate the history of Latin America's insertion into the international system since 1870, examining the various efforts made to achieve a more equitable global position and the extent to which these strategies have succeeded.
- Analysis of the Primary Commodity Exports (PCE) phase and its structural weaknesses.
- Evaluation of Import Substitution Industrialisation (ISI) as a strategy for national development.
- Investigation of the Neo-liberal (NL) era and its impact on macro-economic stability and poverty.
- Examination of the role of regionalism, covering both "old" and "new" regional integration attempts.
- Discussion of future policy directions, focusing on knowledge-based technology and institutional reform.
Excerpt from the Book
Primary commodity exports (PCE)
The PCE phase (1870 - 1930), which is sometimes called the “Golden Age” of Latin America, was characterised by a strong but unilateral and therefore volatile integration into the international system. Pre-independence economic structures of exporting raw materials and cash crops were essentially continued with the only difference that foreign elites were replaced by local elites dominating large landholdings and defending the interests of only a tiny portion of society. Despite the fact that overall export incomes were considerable for quite some time, this model showed three main weaknesses: It strengthened the structural conditions for continued inequality, it fell prey to boom and bust cycles of the prices paid for primary materials, and it failed to establish local economic linkages.
The example of Bolivia illustrates the problematic nature of this model. In 1913, Bolivia’s export earnings depended to 72.3 per cent on tin (Thorp, 1998: 53). Macro-economically speaking, this dependency was no major problem due to the strong demand from the US canning industry. In terms of income distribution, however, things looked different. The tin industry - as all mining economies - depended on capital-intense technologies, which could only be provided by foreign enterprises, local elites or through a cooperation of both. The vast majority of Bolivians were either completely excluded from the economy living on subsistence agriculture or provided cheap labour without being able to improve their living standards substantially.
Summary of Chapters
Primary commodity exports (PCE): This chapter outlines the early integration phase characterized by raw material exports, noting that while it generated wealth for elites, it entrenched inequality and failed to create sustainable local economic linkages.
Import substitution industrialisation (ISI): This section details the strategy of withdrawing from international markets to foster domestic industry behind tariff barriers, highlighting both the GDP growth achieved and the ultimate failure to sustain competitiveness.
Neo-liberalism (NL): This part examines the transition to market-oriented policies, assessing the "Washington Consensus" measures, their contribution to stability, and the socio-economic costs such as financial volatility.
Conclusions and Prospects: The final section synthesizes the historical phases and advocates for a new policy mix, emphasizing technical innovation and institutional reforms over traditional market-driven approaches.
Keywords
Latin America, International system, Primary commodity exports, Import substitution industrialisation, Neo-liberalism, Globalisation, Debt crisis, Regionalism, NAFTA, Mercosur, Structural adjustment, Economic development, Inequality, Washington Consensus, Macro-economic stability.
Frequently Asked Questions
What is the fundamental focus of this research paper?
The paper examines how Latin America has integrated into the global international system since 1870 and evaluates the various political and economic strategies employed to improve its position.
What are the central thematic areas covered in the analysis?
The work centers on three main phases: Primary Commodity Exports, Import Substitution Industrialisation, and the Neo-liberal era, alongside an analysis of regional integration efforts.
What is the primary research question?
The paper seeks to assess the efforts made by Latin American nations to achieve a more equitable insertion into the international system and determines the success of these efforts.
Which scientific approach is utilized?
The author uses a historical-analytical approach, reviewing literature and case studies to compare developmental models over different time periods.
What key aspects are discussed in the main body?
The body covers structural dependencies, the rise and decline of protectionism, the impact of international financial institutions, and the role of regional trade agreements.
Which keywords best characterize the work?
Key terms include Latin America, Structural adjustment, Inequality, Neo-liberalism, and Regionalism.
How does the author evaluate the "lost decade" of the 1980s?
The author views it as a consequence of external debt burdens and structural vulnerabilities, arguing that the region was effectively "financially plundered" during this time.
What does the author suggest for the future of the subcontinent?
The author proposes moving away from automatic market strategies toward active policies, similar to the Asian developmental model, with an emphasis on technical innovation and human resource development.
Why was the "old regionalism" in the 1960s considered largely ineffective?
The author attributes the failure to a lack of political will, insufficient cooperative skills, and the persistence of national protectionism over regional integration.
- Arbeit zitieren
- Iris Schoenauer-Alvaro (Autor:in), 2003, Latin America and the world order, München, GRIN Verlag, https://www.grin.com/document/112835
